A large pharmaceutical company and a smaller biotechnology firm are forming two partnerships, one focused on a drug still in development, and another that will expand the global reach of an already approved asset.

Kenilworth, New Jersey-based Merck and Bothell, Washington-based Seattle Genetics said Monday that the deals would involve bringing the approved cancer drug Tukysa (tukatinib) to markets outside North America and Europe while also collaborating on global development and commercialization of ladiratuzumab vedotin. Tukysa is approved for HER2-positive breast cancer in combination with trastuzumab and capecitabine, while ladiratuzumab vedotin is in Phase II development in locally advanced or metastatic solid tumors that express LIV-1, including in a study combined with Merck’s Keytruda (pembrolizumab) in triple-negative breast cancer.

For the ladiratuzumab vedotin partnership, Seattle Genetics will receive $600 million upfront, while Merck will also make a $1 billion equity investment in the company. Seattle Genetics will also be eligible for up to $2.6 billion in milestone payments. Meanwhile, for the Tukysa deal, Merck will pay Seattle Genetics $125 million upfront and milestone payments of up to $65 million. On top of that, Merck will give the biotech company $85 million in prepaid research and development payments.

Shares of Seattle Genetics were up about 10% on the Nasdaq shortly after markets opened.

“Collaborating with Merck on ladiratuzumab vedotin will allow us to accelerate and broaden its development program in breast cancer and other solid tumors, including in combination with Merck’s Keytruda, while also positioning us to leverage our U.S. and European commercial operations,” Seattle Genetics CEO Clay Siegall said in a statement. “The strategic collaboration for Tukysa will help us reach more patients globally and benefit from the established commercial strength of one of the world’s premier pharmaceutical companies.”

The trial of ladiratuzumab vedotin – which also carries the development name SGN-LIV1A – is a Phase I/II combination study in 122 patients that started in February of 2018 and is expected to reach primary completion at the end of this year and ultimately be finished by March 2023.

Photo: Donald Miralle, Getty Images

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